Purchasing a home warranty when listing your home for sale can help to avoid costly repairs, and bring you and your buyer peace of mind
“My Realtor told me when listing my home, I could add home warranty protection while my property is on the market. I can also purchase a home warranty for the buyer’s peace of mind after they purchase our home. What are the benefits of doing this and why would that be a valuable decision for me?”
What is a Home Warranty?
A home warranty is a form of insurance that can be purchased prior to the sale of a home and extended as desired. The fees for home warranty insurance are typically much lower than the average cost of repairing or replacing major appliances or mechanicals, and deductibles are typically very low or no-cost.
When Can a Home Warranty Help?
It seems almost common to hear that when someone has listed their home, costly repairs occur. If you have already worked diligently in getting your home ready for the market, having additional repairs is an unwelcome surprise. Whether a dishwasher stops working, or the furnace or water heater fails, these could be expensive repairs or replacements. Do you buy a new appliance? Leave it as-is (no longer working)? Or check with a buyer to see if they would agree to share such an expense?
A home warranty can relieve all of these questions with one simple answer: it’s covered! By adding a home warranty, you can reduce your risk as a seller, save on these emerging repair costs, and keep your peace of mind during the selling period.
Did you know that home warranty plans cover all major appliances including your water heater, furnace and air conditioning unit? Depending on the coverage plan you choose, your portion of each expense could vary.
Home Warranty: An Example
In a typical home warranty, when a home is on the market, a seller’s cost can be as little as $0 and a maximum of $75 for coverage to repair or replace such items as a water heater, furnace or AC unit. This coverage commonly continues for six months while your home remains on the market. After that six-month time period, your coverage simply expires or you can choose to extend the coverage based on your needs.
If you choose to extend coverage there are no additional costs, however, there are details to consider:
- If you have a claim, you would be responsible for either buying a home warranty for the buyer or paying back any claim costs incurred while your home was on the market
- You could disregard any claim costs by buying the home warranty for yourself if your property did not sell
- If you extended coverage and there were no claims filed, you could simply cancel the coverage and not be required to purchase a home warranty for the buyer
In this example of typical home warranty coverage, that’s incredible savings for the unexpected potential costs of repairs and replacements!
List of Covered Items in Home Warranty Service.
What About Selling a Home with Older Mechanicals?
If you are selling a home that has older mechanicals and appliances, buyers may potentially ask for these to be replaced during a home inspection. If you have a home warranty during listing you not only have coverage for potential issues during time on the market, you also have the opportunity to purchase a home warranty extension to benefit the buyer beyond closing. Such a home warranty may not only save expenses for you and the buyer, but, will also make the purchase more attractive to the buyer. Peace of mind for both seller and buyer is valuable!
Extending the Home Warranty
All home warranty programs offer sellers the option to purchase a 1-year home warranty for their buyer. This warranty extension begins on the day of closing. In this instance, the home warranty can be paid over the phone by calling the home warranty company prior to closing, or alternatively, the title company can include the warranty extension cost in the closing documentation. A home warranty extension helps sellers save money, but also brings significant benefit to the home buyer. Including a home warranty extension often influences buyers to select a warrantied home over another similar property.
There are many different home warranty companies to choose from. Route 63 Realty recommends Home Warranty Inc. They provide free coverage to sellers for 6 months with the option to purchase protection for water heater, furnace and AC unit for an additional $75. If you have a claim, there is a $100 charge for having a service person come out to diagnose, repair or replace the faulty appliance or mechanical item. Buyer home warranty plans cost $575 minus $100 discount when utilizing Route 63 Realty. The plan coverage also lasts 14 months! That is two months longer than most other warranty company plans.
*Please note that any appliances and mechanicals covered with home warranty protection need to be in working order prior to adding coverage.
For any further assistance regarding home warranty plans, contact us. We offer brochures and contact information in our office or you can visit the Home Warranty Inc. website for more information.
Stop by or give us a call at Route 63 Realty in Hayward, Wisconsin 715-558-7846. Our staff are readily available to help answer any questions you may have.
“Bringing Buyers and Sellers Together One Route at a Time!” – Route 63 Realty